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3.1 Exhaust Emission Bin

The Regulations include, amongst other requirements, technical standards establishing maximum limits on vehicle exhaust emissions. These technical standards correspond to those of the U.S. EPA through incorporation by reference to the U.S. Code of Federal Regulations (CFR), to ensure that the specified standards are identical in both countries.

Vehicles are required to comply with emission standards specified for a defined "full useful life." A full useful life is specified in years and as accumulated mileage, whichever comes first, and varies depending on the class or subclass of a vehicle. The full useful life for light-duty vehicles (LDV) and light light-duty trucks (LLDT) is 10 years or 192 000 km (120 000 miles). The full useful life for heavy light-duty trucks (HLDT) and medium-duty passenger vehicles (MDPV) is established at 11 years or 192 000 km (120 000 miles).

Companies certify every vehicle to one of eleven bins, each of which contains standards for oxides of nitrogen (NOx), non-methane organic gases (NMOG), carbon monoxide (CO), formaldehyde and particulate matter (PM), as presented in Table 1.

Note: The equivalent limits in units of grams/km are obtained by multiplying the grams/mile value by 0.621.

11

0.9

0.28

7.3

0.032

0.12

10

0.6

0.156/0.230

4.2/6.4

0.018/0.027

0.08

9

0.3

0.090/0.180

4.2

0.018

0.06

8

0.20

0.125/0.156

4.2

0.018

0.02

7

0.15

0.09

4.2

0.018

0.02

6

0.10

0.09

4.2

0.018

0.01

5

0.07

0.09

4.2

0.018

0.01

4

0.04

0.07

2.1

0.011

0.01

3

0.03

0.055

2.1

0.011

0.01

2

0.02

0.01

2.1

0.004

0.01

1

0.00

0.00

0.0

0.000

0.00

Bins 9 and 10 are only available for the 2004 to 2006 model years for light-duty vehicles and light light-duty trucks, and up to and including the 2008 model year for heavy light-duty trucks and medium-duty passenger vehicles. Bins 8 through 10 contain additional temporary, less stringent standards for certain pollutants and for certain vehicles. Bin 11 is only for medium-duty passenger vehicles and is available up to and including the 2008 model year. Beginning in the 2009 model year, applicable standards are limited to bins 1 to 8 for all light-duty vehicles, light-duty trucks and medium-duty passenger vehicles.

3.2 Fleet Average NOx Standards

The Regulations establish fleet average NOx standards for the 2004 and later model years. Each new light-duty vehicle, light-duty truck and medium-duty passenger vehicle is required to be certified to one of the bins presented in Table 1, for which there are specific emission standards for NOx and other pollutants. Based on the number of vehicles in each bin, a company calculates a fleet average NOx value for each model year.

Table 2 presents the fleet average NOx standards for a company's fleet5 of light-duty vehicles and light light-duty trucks and its fleet of heavy light-duty trucks and medium-duty passenger vehicles.

Table 2: Fleet Average NOx Standards (grams/mile)

Model Year

LDV/LLDT

HLDT/MDPV

Note: A company's combined fleet of LDV, LLDT, HLDT and MDPV of the 2009 and later model years will be subject to a single fleet average NOx standard of 0.07 grams/mile.

2004

0.25

0.53

2005

0.19

0.43

2006

0.13

0.33

2007

0.07

0.20

2008

0.07

0.14

2009

0.07

The Canadian fleet average NOx standards for the phase-in period represent an approach that is equivalent to the corresponding U.S. Tier 2 program. For example, in the 2004 model year, the U.S. rules require that a minimum of 25% of a company's fleet of light-duty vehicles and light light-duty trucks meet a fleet average NOx standard of 0.07 grams/mile, and the remaining 75% is subject to a fleet average NOx standard of 0.3 grams/mile. The corresponding Canadian fleet average NOx standard of 0.25 grams/mile applies to a company's entire fleet of light-duty vehicles and light light-duty trucks of the 2004 model year (i.e. effectively represents the weighted average of the U.S. phase-in).

As of 2009, when the fleet average NOx standards are fully phased in, a company's combined fleet of light-duty vehicles, light-duty trucks and medium-duty passenger vehicles will be subject to a single fleet average NOx standard of 0.07 grams/mile, corresponding to the NOx standard in bin 5.

The fleet average NOx standards also serve as the reference point for NOx emission credits and deficits. The Regulations provide flexibility for a company to exclude its group of EPA-certified vehicles that are sold in both Canada and the U.S. from mandatory compliance with the Canadian fleet average NOx standards. Available elections and credits/deficits are discussed in more detail in sections 3.4 and section 3.53.5 of this document.

3.3 Calculation of Fleet Average NOx Values

The fleet average NOx value is calculated in accordance with the following equation:

[1]

Where:

A represents the NOx standard for each full useful life emission bin;

B represents the number of vehicles in the fleet that conform to that NOx standard; and

C represents the total number of vehicles in the fleet.

Fleet average NOx values must be rounded to the same number of significant figures that are contained in the total number of vehicles in the fleet in the denominator of equation [1], but to at least three decimal places.

Since fleet average NOx standards are different for the various regulated classes of vehicles for the 2004–2008 model years, for these years, a company must calculate separate fleet average NOx values for:

its fleet of light-duty vehicles and light light-duty trucks; and

its fleet of heavy light-duty trucks and medium-duty passenger vehicles.

Starting with the 2009 model year, a company is required to calculate only a single fleet average NOx value for its combined fleet of light-duty vehicles, light-duty trucks and medium-duty passenger vehicles.

3.4 Election for Vehicles Covered by a U.S. EPA Certificate

The objective of the fleet averaging provisions is to create a regulatory framework that achieves a Canadian vehicle fleet emission performance comparable to that of the U.S. The vast majority of vehicles sold in Canada are vehicles designed for and marketed in the U.S. as well. In developing the fleet averaging provisions, Environment Canada believes that a U.S. fleet designed to meet the U.S. fleet average standard (i.e. 0.07 grams/mile in 2009) will, when sold concurrently in Canada, yield a similar but not necessarily identical result in Canada. An analysis conducted by Environment Canada6 indicated that, even under extreme scenarios, the variations between Canadian and U.S. fleet averages are expected to be small. Nonetheless, given the large numbers of on-road vehicles in Canada and because vehicles are important contributors to air pollution, Environment Canada believes that an appropriate regulatory framework is necessary to remove the opportunity for individual companies to systematically sell a significant number of higher emitting vehicles in Canada than would be allowed in the U.S. This was judged to be important to provide assurance that the long-term environmental performance of the Canadian fleet will be comparable to that of the U.S. Environment Canada recognized, however, that the Canadian market is not identical to the U.S. Therefore, the Regulations allow a company to elect to exclude the group of vehicles that are sold concurrently in Canada and in the U.S. from the mandatory fleet average standard. A company that chooses to make the election in a model year is subject to the following restrictions:

The company cannot include vehicles in the group subject to the election if the total number of vehicles sold in Canada exceeds the total number of vehicles sold in the U.S. under the same certificate of conformity in that model year. This restriction does not apply to vehicles that conform to a full useful life emission bin having a NOx standard equal to or less than the applicable fleet average NOx standard for that model year (i.e. achieve better than average emissions).

The company must include all eligible vehicles in that group. Thus, a company could not choose to exempt only a portion of its eligible vehicles while allowing others to remain in the portion of their fleet subject to the averaging requirements.

The company cannot generate any emission credits or transfer any emission credits to another company in the model year that it chooses to exclude vehicles subject to the election if the average NOx value for the group of vehicles subject to the election exceeds the applicable fleet average NOxstandard.

The company forfeits any emission credits it may have obtained in previous model years if the average NOx value for the group of vehicles subject to the election exceeds the applicable fleet average NOx standard.

Environment Canada believes that the various provisions are structured in a manner that will deliver fleet average emissions comparable to the U.S., minimize the regulatory burden on companies, and allow companies to market vehicles in Canada independently from the U.S.

3.5 Emission Credits/Deficits

NOx emission credits/deficits are calculated in accordance with the following equation:

(A-B) x C [2]

Where:

A is the fleet average NOx standard;

B is the average NOx value in respect of the fleet; and

C is the total number of vehicles in the fleet.

NOx emission credits/deficits are expressed in units of vehicle-grams per mile and must be rounded to the nearest whole number. NOx emission credits are obtained when the average NOx value in respect of a fleet of a specific model year is lower than the fleet average NOx standard for that model year. NOx emission deficits are incurred in a specific model year when the average NOx value in respect of a fleet of a specific model year is higher than the fleet average NOx standard for that model year.

NOx emission credits for a specific model year are credited on the last day of that model year and may be used to offset any outstanding NOx emission deficit, be carried forward to offset a future deficit or be transferred to another company. A deficit must be offset no later than the third model year following the year in which it is incurred. If any part of a NOx emission deficit for a specific model year is outstanding following the second model year after the model year in which the deficit was incurred, the number of NOx emission credits required to offset that outstanding deficit in the next model year is 120% of the deficit.

3.6 End of Model Year Reports

The Regulations require that all companies submit a report to the Minister of the Environment no later than May 1 after the end of the model year. The end of model year report must contain detailed information concerning the company's fleets and/or groups of vehicles, including information related to:

statements of allowable elections made by the company in complying with the fleet average NOx requirements of the Regulations;

average NOx value(s) achieved;

values used in calculating a fleet average NOxvalue;

calculation of NOx emission credits and/or deficits;

balance of credits or deficits;

credit transfers to or from the company.

Note 5: "Fleet" refers only to vehicles of a specific model year that a company manufactures in Canada, or imports into Canada, for the purpose of sale to the first retail purchaser.